U.S. Postal Service Case 1

1. Why is it important for the U.S. Postal Service (USPS) to have a high volume of mail to process?

The United States Postal Service (USPS) has grown to become the largest provider of mail service in the world during one of the peaks of its economic lifetime. As the company grew bigger and bigger to accommodate the increased demand for its services, the USPS increased its productive capacity through expansion by acquiring the necessary equipment and other technological tools. These different types of machinery are designed to handle high volumes of workload and fast-paced processes. Unfortunately, the equipment that USPS uses require that they process a high volume of mail in order for them to be cost-effective. The concept at hand in this scenario is the economies of scale whereby there is a certain minimum productivity level that must be met to be able to save on the cost of operations. In the situation of USPS, processing high volumes of mail is a necessity for financial reasons to distribute the cost of electricity and other overhead costs per mail processed.

2. What caused productivity to increase?

Productivity became one of the most important factors in the operations of the USPS. Increasing the use of automation and introducing zip codes were the major causes of increased productivity.Automation started in the mechanization of mail processing in the 1950s and 1960s that allowed better and faster operations. Most mail had word-processed addresses and stamps that machines read in order to sort the mail to the recipient location. Only handwritten items were manually processed by the employees. Later on in 1978 and 1983, the introduction and expansion of zip codes was conceptualized respectively that led to the use of more automated equipment to speed up organization and sorting of mail. Mails were pre-bar-coded to give